Local lab claims success in diabetes treatment, aims to make next blockbuster drug

Press Photo/Rex LarsenSeeing how it works: Dark spots on X-ray film in the line next to the number 16 show the specific molecules in human cells that the drug mitoglitazone acts on. Numbers at the very top have been blurred to protect proprietary information about the diabetes drug.

This drug shouldn't work.

That's what the conventional wisdom and most of the scientific literature says, yet a couple of research scientists are staking their careers and a handful of Grand Rapids investors are betting millions of dollars it will.

Press Photo/Rex LarsenThe edge: Research scientists Jerry Colca, left, and Rolf Kletzien said they believe their treatment avoids the adverse side effects of current drugs.

Two refugees from pharmaceutical giant Pfizer believe they have found a better treatment for type 2 diabetes without the side effects of current drugs, and they have created a small West Michigan company to produce it and take it through the clinical trials required for federal approval.

In that sense, too, they're bucking the conventional wisdom that only Big Pharma has the resources to bring a new drug to market.

"We realized if we didn't do it, it wasn't going to get done," said Jerry Colca, co-founder of Kalamazoo-based Metabolic Solutions Development, which has strong financial and management backing in Grand Rapids.

If Colca is right, the reward -- given that type 2 diabetes affects nearly 24 million Americans -- could be blockbuster sales of the sort giant companies dream about.

Growing smaller, nimbler

It's part of a trend in the drug industry: Many scientists who lost their jobs when Pfizer and others cut back are forming small biomedical firms of their own.

The business "is in flux, in that these small research and development enterprises are far more nimble and can develop these drugs faster than Big Pharma," said Stephen Rapundalo, a former Pfizer employee and president of MichBio, a nonprofit trade group formed to draw more life science business to the state.

He estimated around 40 small companies, each focused on a niche in the drug business, have sprung up around Michigan as Pfizer phased out operations in Kalamazoo, Holland and Ann Arbor.

Working on glucose

Colca joined Upjohn in 1984, before two mergers made it a part of Pfizer, and began working on a class of drugs that appeared to lower blood glucose levels. In most diabetics, the pancreas is unable to produce enough insulin to convert the glucose to energy, which can lead to heart disease, nerve damage, blindness and other disorders.

"We didn't have the insight at that time to know why they (the drugs) worked," Colca said. "Nobody did."

Some researchers believed the drugs worked by targeting a receptor called PPAR gamma on the nucleus of cells.

"That became the conventional wisdom, that you had to target PPAR gamma," Colca said. "All the drug companies went in that direction."

He thought they were wrong.

The research continued until 1993, when Upjohn dropped out of an effort to develop a diabetes drug with a Japanese firm, Takeda.

"It was a disaster to me," Colca said. "We were so excited. We could see this was the future."

Enduring the merger mill

When Upjohn merged with the Swedish firm Pharmacia, he tried to convince management the industry was heading in the wrong direction, he recalled.

But Pharmacia halted his research, and "I had to set up all sorts of programs I didn't believe in," Colca said.

In 2003, after Pharmacia became Pfizer, his Kalamazoo job was eliminated, and he transferred to St. Louis. Two years later, that job was eliminated.

Proving a right approach

By then, Takeda had introduced what would become the leading diabetes drug Actos, based in part on Colca's research. Actos does lower blood glucose levels, but it has undesirable side effects in some patients, including weight gain, water retention, a decrease in bone density and congestive heart failure.

Colca thought it was because Actos, while properly targeting a part of the cell called the mitochondria, also targeted the PPAR gamma receptor. He believed another drug in the same class could control diabetes equally well without those side effects by targeting only the mitochondria.

"If we'd go to any of the drug companies about this, they hated to hear it," Colca said. "They did everything but burn me at the stake."

He and his former boss, Rolf Kletzien, whose job also was eliminated, talked about Colca's theory. Kletzien was skeptical but eventually came around.

But developing the drug would take more money than the two could raise, so they approached Hopen Therapeutics, a new company formed by several Grand Rapids businessmen to invest in and help manage emerging life sciences companies.

"They're looking at us like, 'If this is such a good idea, why in the world wouldn't the large pharmaceutical companies listen to you?'" Colca recalled.

Spending some seed money

They decided to do it themselves, starting Metabolic Solutions Development in a spare bedroom at Colca's Kalamazoo condo and investing $125,000 each.

"It helped us, obviously, when someone's got their own flesh and blood in the game," Hopen President Mark Olesnavage said. "That means a lot."

Since then, Hopen and others have invested $10.5 million in Metabolic Solutions and are raising millions more. In October, Michigan's 21st Century Jobs Fund lent the company $2.4 million.

Getting trials under way

Early indications are Colca was right. The new compound, called mitoglitazone, does appear to lower blood glucose with none of the side effects.

The first phase of clinical trials with human patients was promising. In September, the company began a second phase at about 10 locations around the country. If the drug makes it through a third phase, it could win Food and Drug Adminstration approval and be on the market by 2013, Colca said.

But getting it there could cost as much as $100 million. Ultimately, Metabolic Solutions could license the drug to a large pharmaceutical company. It could outsource manufacture to another company, possibly in India. Or it could decide to produce the drug itself.

For now, the company works out of a small, rented laboratory in Kalamazoo, not much larger than the average living room and outfitted with surplus Pfizer equipment.

Going beyond diabetes

If mitoglitazone wins approval, Colca hopes eventually to combine it with other drugs to lower cholesterol and blood pressure. Those ailments are part of a condition called metabolic syndrome, which can be a precursor to type 2 diabetes. Treating patients early could help them avoid developing diabetes and save health care costs, Colca reasoned.

Actos, the market leader, has annual sales worldwide of about $4 billion. Actos and the No. 2 diabetes drug, Avandia, have combined sales of about $6 billion.

"If you believe the naysayers, this drug shouldn't work," said Olesnavage, who became Metabolic Solutions' CEO. "We believe strongly this is not a shot in the dark."

Conservatively, Metabolic Solutions is projecting annual sales of $1.6 billion for mitoglitazone, although Colca is confident it will become the preferred treatment for type 2 diabetes. He wonders how many other promising drugs have been overlooked.

"You have to work at a big pharmaceutical company to understand this: They have tunnel vision," he said. "This is one idea. We had it. How many ideas have other scientists had that they weren't able to develop?

"This is the place to do it," he said. "There's enough resources in this part of the state to make this happen."